Mizuho Bank starts flexible mortgage payment program

Mizuho Bank on Monday will introduce a housing loan program that lets borrowers reduce their regular repayments when they are in need of money and repay the installments when they are in better financial shape.

The program, which can be applied to existing housing loans, will allow borrowers to make smaller repayments when finances become tight due to such reasons as a need to increase spending on children or home improvements, or a drop in income caused by maternity leave, the bank said Friday.

Borrowers can make bigger repayments when households have greater financial capacity, such as when both the husband and wife are working and children have grown up.

The program is the first of its kind for a Japanese bank, the unit of Mizuho Financial Group Inc. said. Applicants must already have clean repayment records, and existing borrowers must have an income no lower than when they first applied for their mortgage.

The reduction rate and the period, which is limited to one year, must be agreed upon by the applicants and the bank in light of the repayment plans for their mortgages. The program cannot cover periods over a year but can be used multiple times for up to five years.

Banks are wooing customers seeking to buy homes before the sales tax hike next April. Although the main point is interest rates, Mizuho hopes to up the ante with flexible payments.